Argentina's YPF is seeking buyers for its interests in six blocks in the southern province of Rio Negro, a move aimed at focusing on what it considers more profitable assets elsewhere, the state-run energy company said Friday.
YPF is offering the blocks to 30 small and medium-sized companies with operations in Argentina, and expects to close sales by the middle of July, a spokesman said.
"These are blocks that YPF can't develop as efficiently as it would like because of the cost structure," he said. "We believe that a smaller-sized company can achieve better results."
The blocks account for about 1% of the company's production, which in April was averaging 231,000 b/d of oil and 38.2 million cu m/d of natural gas, according to data from industry group Argentine Oil and Gas Institute (IAPG).
Of the blocks, YPF operates three as a 100% owner. These are: El Santiagueno, which was producing 1,200 b/d of oil and 147,000 cu m/d of gas in February; El Medanito, with production of 2,100 b/d of oil and 122,000 cu m/d of gas; and Barranca de los Loros, producing 44 b/d.
YPF does not operate the other three blocks, in which it holds minority stakes. This includes a 35% stake in Loma Negra, with production of 647.8 b/d of oil and 110,000 cu m/d of gas; a 35% stake in La Yesera with 641 b/d of oil and 65,000 cu m/d of gas; and a 30% stake in Agua Salada with production of 647.8 b/d and 110,000 cu m/d of gas, according to the company.
The plunge in global oil prices since mid-2014 and the impact of a contracting Argentine economy on domestic sales this year has forced YPF to sideline rigs and cut its capital-expenditures plan by 20% to 25% for 2016.
The company has said it expects the spending cuts will lead to flat production this year compared with 2015.
YPF's chairman, Miguel Gutierrez, said earlier this month a focus for the company will be on improving efficiency to cut costs in order to sustain investment, activity and employment.
This includes projects to bring online new oil and gas processing plants to boost output capacity. Another project is to start up a sand production plant to supply proppant for fracking in Vaca Muerta, a huge shale play that has been a source of its production growth since 2013.
Other projects include ramping up drilling for heavy crude, developing a new conventional gas find, and installing a new water injection plant for increasing secondary recovery capacity at lower costs.
YPF is the country's biggest producer, with a 44% share of oil and 30% of gas, according to IAPG.
